Bad Apple.

Not surprisingly, risk appetite waned on Tuesday as the US returned from a holiday to news that Apple likely won’t meet its revenue guidance thanks to the impact of the coronavirus.

The news – which hit late Monday – is being treated as a harbinger of what’s in store as multinationals begin to take stock of the extent to which the mini-pandemic has affected their global operations.

China reported 1,886 additional coronavirus cases as of Monday. That brings the total to 72,436. The death toll rose by 98 to 1,868.

Asian shares generally fell. Japanese stocks dropped a fourth session and a sixth in seven. Ongoing news flow from the Diamond Princess cruise ship (the most concentrated cluster of coronavirus cases outside mainland China) isn’t helping sentiment and Monday’s disastrous fourth quarter GDP data didn’t do anyone any favors either.

South Korean shares declined sharply. ”Emergency prescriptions are needed for an emergency situation”, President Moon Jae-in declared, at a cabinet meeting, where he called for “special measures” both to protect citizens’ safety and safeguard the economy, which was waylaid by the trade war last year and now faces a new threat.

“This unexpected news confirms the worst fears of the Street that the virus outbreak has dramatically impacted iPhone supply from China/Foxconn with a demand ripple impact worldwide”, Wedbush said of Apple, adding that “the magnitude of this impact to miss its revenue guidance midway through February is clearly worse than feared”. Goldman is calling it a “temporary issue”, although the bank did slash its outlook for the next two quarters.

The shares dropped some 4% in the pre-market, while the company’s European suppliers slid as well.

Yield curves bull flattened globally. 30-year US yields fell back below 2%, as the risk-off mood proliferated. Crude fell. Gold rose. “And the seas boiled and the skies fell”.

“The storm sweeping the global economy and global markets has shaken the apple tree and some of the fruit is getting trampled underfoot”, SocGen’s Kit Juckes wrote Tuesday. “The FX market, which remains utterly one-dimensional, favors gold, yen and Swiss franc and turns its nose up at the rand, the won and the Antipodean dollars”.

Juckes included this image…

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